Oi (OIBR4) Q4 2023 earnings summary

Executive summary

• Q4 net revenue was R$2.276bn, down 13.1% YoY, as Non-Core and legacy declines outweighed Fiber and ICT growth; Core revenue represented 72% of total.

• FY23 net revenue fell 22.9% to R$9.718bn; 4Q23 net loss was R$486mn.

• Routine EBITDA was negative R$107mn in 4Q23, with a -5.0% margin; net debt was R$23.292bn.

Financial highlights

• Consolidated net revenue was R$2.276bn in 4Q23 versus R$2.618bn in 4Q22; Core revenue was R$1.638bn versus R$1.672bn.

• 4Q23 net loss was R$486mn versus R$17.149bn in 4Q22; FY23 net loss was R$5.428bn.

• 4Q23 net financial expenses were R$1.007bn, up 59.5% YoY; FY23 expenses were R$5.2bn, up 33.1%.

• Routine capex was R$186mn in 4Q23, down 65.1% YoY; FY23 capex was R$869mn.

• Cash ended 4Q23 at R$2.194bn; gross debt was R$25.486bn and fair-value net debt R$23.292bn.

Outlook and guidance

• Creditor commercial terms were agreed in March; the meeting was suspended until April 10, 2024, for final documents and a restructuring-plan vote.

• Plan proposals include up to US$650mn equivalent of super-priority post-petition debt, potential new capital or credit lines, asset sales, and supplier-credit restructuring.

• A proposed STFC concession migration to authorization would preserve service in areas without alternative voice service for a defined period, subject to ratification and guarantees.

• Bridge financing cash-in was expected April 30, with new-money cash-in from 2Q24 onward; execution of restructuring measures was expected from 2H24.